Shareholders Will Be Pleased With The Quality of Dongbang Transport Logistics' (KRX:004140) Earnings

Dongbang Transport Logistics Co., Ltd. (KRX:004140) just reported healthy earnings but the stock price didn't move much. We think that investors have missed some encouraging factors underlying the profit figures.

View our latest analysis for Dongbang Transport Logistics

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Dongbang Transport Logistics' profit was reduced by ₩5.2b, due to unusual items, over the last year. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Dongbang Transport Logistics to produce a higher profit next year, all else being equal.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Dongbang Transport Logistics.

Our Take On Dongbang Transport Logistics' Profit Performance

Unusual items (expenses) detracted from Dongbang Transport Logistics' earnings over the last year, but we might see an improvement next year. Because of this, we think Dongbang Transport Logistics' earnings potential is at least as good as it seems, and maybe even better! Furthermore, it has done a great job growing EPS over the last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. If you want to do dive deeper into Dongbang Transport Logistics, you'd also look into what risks it is currently facing. For instance, we've identified 4 warning signs for Dongbang Transport Logistics (1 is a bit unpleasant) you should be familiar with.

This note has only looked at a single factor that sheds light on the nature of Dongbang Transport Logistics' profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.